Risk-based, Best Practice Principles for Drinking Water Quality Regulation

Cite: Dyson, M. and Davison, A. (2020) Risk-based, Best Practice Principles for Drinking Water Quality Regulation.

Governance is an essential part of managing any resource, but if you were starting from a clean slate, what sort of framework would you use? If you already have regulation in place, how can you test if it is actually fit for purpose, including the social and cultural aspects of the time, and identify what needs to be changed?

ISO 31000 is the international standard of risk management. It applies to any aspect of risk (‘risk’ being ‘the effect of uncertainty on objectives’). Understanding risks associated with a statutory regime is just as important as understanding risks associated with any aspect of managing a coherent and functional society.

Using ISO 31000, we have thought about what the risks might be to achieving the objective of a fit-for-purpose legal and institutional framework for drinking water quality, and put forward some best practice principles to help address these risks. The principles will help you to assess your current legal framework or if you are starting from scratch, help you to craft a robust and contextually relevant legal framework for regulating drinking water quality.

Understanding context

Before you can sensibly tackle the question of what elements you need in your regulatory regime, or how your particular regime measures up against best practice, you first need to understand your particular context. Context means understanding what’s around you, the framework within which you exist and operate.

Understanding your context is essential for proper operation and function – it’s like stepping out onto a sporting field or getting into your car – you need to know the rules so you can play the game properly or drive the car without causing an issue. It’s the same with legislation. For drinking water supply, it is necessary to think about a range of issues to fully understand context, we have provided some examples in Table 1. Table 1. Example contextual fundamentals for good practice drinking water quality regulation.

Contextual Item	Notes
Stakeholders	Who are your stakeholders and what are their drivers?
Raw water sources	What are the current and foreseeable sources of water for drinking water supply? Are these natural sources only, or are you looking at re-use options? Are your options being drawn from outside of your catchment, are they likely to impact on other communities?
External political and institutional setting	Are you looking at a system for regulating drinking water quality that will apply only in a single local government district, or is drinking water quality regulation in your district part of a larger context? Is your country part of a federation of states?
Geography	Do you share drinking water catchments or other water sources (e.g. secondary sources such as treated water discharged to a shared river system) with other jurisdictions? Are those jurisdictions part of your country or state, or are they a foreign country?
Administrative capacity	What sort of administrative capacity is available to you? There are many different styles of best practice regulation – you need to choose one that you will be able to implement and administer effectively and one that will be amenable to sound compliance oversight. Consider for example financial or human resource or technology constraints, and cultural and other factors.
Type of suppliers	Will you be regulating both private and public water suppliers? Will you be capturing non-commercial suppliers e.g. bed and breakfast or other entities that provide water to their own customers?

What are the risks?

Once you have understood your context, the next step is to consider what risks there might be to not achieving the objective of a fit-for-purpose drinking water quality legal framework. Some example risks are shown below in Figure 1.

How do we manage the risks?

A fit-for-purpose legal and institutional framework for drinking water quality will be built around, and reflect, some high-level principles. While each jurisdiction will probably have slightly different principles, according to their own context and specific risks, we propose the following core principles shown in Figure 2 and in more detail in Table 2.

Table 2. Core principles – further details.

Principles	Notes
P1: Equal protection for all citizens.	Water quality regulation should provide the same level of protection for all citizens of a country. A national framework for water quality regulation should be applied consistently across all jurisdictions nationally (federal, state and local) regardless of jurisdictional boundaries. Where risks are different in different locations, or for different types of suppliers, the framework should enable application of different levels of regulation or regulatory focus. Where authority for aspects of water quality control is split between federal, state and local governments, there should be a national forum for developing and testing aspects of the national framework, and for resolving disagreement between jurisdictions.
P2: Evidence-based, transparent decision-making.	Decisions should be based on evidence, and decisions and decision-making processes should be explicit and transparent. For example, decisions of a scientific nature (e.g. what contaminants should be regulated, and at what level) should be based on scientific advice. Decisions which require a risk-based approach should take account of a range of other explicit factors.
P3: Effective stakeholder engagement.	Stakeholders should be consulted on relevant decisions – e.g. about water quality parameters, including what contaminants will be regulated, and at what levels.
P4: Regulation of suppliers of drinking water.	Suppliers of drinking water should be regulated. A risk-based approach to regulation allows for tiered intensity of regulation (e.g. a continuum from licences with stringent input-specific conditions and oversight, through to self-regulation based on compliance with specified outputs, Codes or other forms of regulation).
P5: Effective enforcement.	Requirements for all suppliers (whether licensed or self-regulating) should be effectively enforced with adequate tools and penalties included in legislation. Where suppliers are licensed, conditions are explicit and enforceable. Include a monitoring framework for monitoring of the product as well as monitoring of compliance against system management requirements (e.g. a requirement to develop, implement and operate to a drinking water quality management plan). Ensure that everyone is on the same page with what is expected in the auditing framework and approach. Ensure a level playing field for all drinking water suppliers, private or public. Avoid compliance requirements which will lead to unnecessary regulatory burden or inequity across supplier types.
P6: Integrated regulation.	Drinking water safety begins at the source, and requires adequate regulation of risks from catchment to tap. It is not necessary for all aspects to be regulated by the same piece of legislation, provided the different regulatory regimes are adequately integrated. Alternate sources of supply for drinking water e.g. treated effluent, stormwater, should be considered and integrated into the legislative framework. All subordinate instruments (policies, guidelines, codes etc) under related legislation should be developed and /or reviewed to ensure they are consistent with and complementary to one another. Ensure that if instruments are intended to be binding, they are identified as such e.g. referred to by regulation or compliance with an instrument is specifically required by condition of licence.
P7: Clarity in expectations.	Clear guidance on expectations including a tiered approach for suppliers of differing capabilities e.g.: • Tier A Rule-based Licence: ‘Tell us what the rules are, apply them to everyone, don’t change them without consulting us’. • Tier B Outcomes-based Licence: ‘Tell us what outcomes we must meet, allow us to develop our own approach, endorse or reject our proposal in a timely manner with clear feedback on what was incorrect’.
P8: Accessibility.	Attention should be paid to drafting style including contemporary methods of displaying information such as diagrams and accompanying text e.g. summaries. Internal stakeholders who will be tasked with the administration of the statutory framework should be consulted e.g. forms or other which are part of the framework.

How do we know the risks are being managed?

Once the above steps have been completed, the next approach is to ensure that a framework is in place to confirm that the identified risks are actually being managed and that the legal and formal framework remains relevant. Periodic review and monitoring needs to be built into the legislation.

Good legislation and good regulatory regimes are driven by good policy, and soundly implemented through good administrative practice.

Good policy is evidence-based, and seeks out and responds to change. To be responsive to change, you must keep under review the effectiveness of operation of legislation in relation to the risks being regulated. Effectiveness of a regulatory regime should be actively and formally monitored against explicit measures, and requirements for monitoring and review should be built into the legislation. If monitoring and review show a need for change in either the regulatory or administrative framework, it should be possible to make those changes in a way that is cost-effective and timely. A good regulatory regime will allow this to happen.

Good administrative practice is characterized by integrity (accurate and ethical application of the law), consistency, timeliness and cost-effectiveness. A good regulatory regime will include checks and balances to help ensure integrity and consistency. It will establish a framework that is timely and appropriate in terms of costs to both regulators and those who are regulated, and that is proportionate to the risks being regulated.

Undertaking a review of your drinking water quality governance arrangements may help you to identify gaps or weaknesses which need to be filled to help protect both you, and the stakeholders you regulate – especially in these times of water security risks and the need to consider alternate sources of water for the drinking water supply.

Megan Dyson, Law and Policy

Annette Davison, Director and Principal Risk Analyst, Risk Edge® Pty Ltd; Director and Chief Risk and Product Officer, D2K Information Pty Ltd

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